Endurance on a ride as 2-wheeler demand rises

Fifty-six-year-old businessman Anurang Jain wants profit to grow at a faster pace than revenue. In the past five consecutive years, auto component maker Endurance Technologies has delivered Jain’s expectation. No wonder that the firm has created ~85 billion in wealth for shareholders in the past 20 months after the listing.

The market gave thumbs up to Jain's company on the day of listing (October 19, 2016). Endurance closed the day with a 37 per cent gain over the issue price of ~472 per share. The listing helped Endurance raise ~11.61 billion and turned the promoters a billionaire.

The fast run has continued after the IPO. The stock closed at ~1,244 on Tuesday and the promoters’ wealth is now valued at ~144 billion. Jain, a nephew of leading industrialist Rahul Bajaj, started as a supplier of aluminium casting to Bajaj Auto, along with twin brother Tarang, in 1985-86. Tarang now runs another auto parts firm Varroc, which is raising ~19.51 billion through an IPO.

“The first eight years were difficult but there was lot of learning. We expanded and got into products where we owned the technology and got a better profitability,” Jain, managing director, told Business Standard. The new products- suspension systems, clutch assembly, disk brakes, etc, helped Endurance in diversifying and finding several new customers.

The company grew 50 times between 1996 and 2006, during which it also started catering to aftermarket. The dependence on Bajaj Auto was still high at 75 per cent. “We decided that we must diversify base and also look for overseas acquisitions. We spent around ^47 million between 2006 and 2007 to acquire a company each in Germany and Italy,” said Jain.

The move added a top line of ^100 million and brought big names such as BMW, Audi and Porsche in its list of clients. The overseas revenue is now ^252 million and it enjoys a high Ebitda margin of 18 per cent.

The firm doubled m-cap to ~175 bn in 20 months